The fund's portfolio manager goes to great lengths to uncover information about the companies he selects. Before investing in companies for the portfolio, management and/or research analysts frequently:
- Meet the company's management, evaluate their roles and capabilities, review the company's policies and procedures and consider other factors that may affect its success
- Look for companies with a positive catalyst for growth, such as a new product, acquisition, divestiture, restructuring or change in the marketplace
The portfolio managers focus primarily on stocks with a market capitalization at time of purchase below the ceiling established by the Russell Midcap Growth Index.
Investments in mid-cap companies generally involve greater risks than investing in larger capitalization companies. Mid-cap companies often have narrower commercial markets, more limited managerial and financial resources, and more volatile trading than larger, more established companies.
Growth companies are expected to increase their earnings at a certain rate. When these expectations are not met, investors may punish the stocks excessively, even if earnings showed an absolute increase. Growth company stocks also typically lack the dividend yield that can cushion stock prices in market downturns. The companies engaged in the technology industry are subject to fierce competition and their products and services may be subject to rapid obsolescence. The values of these companies tend to fluctuate sharply.